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Fall 2009

ISSN 0890-913X

Volume 25, Number 1

Categories: Economics | Fall 2009

Lessons To Be Learned From The Financial Crisis

Steve N. Robinson, University of North Carolina–Wilmington

Derrick P. Nantz, Cape Fear Community College

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TheJournalofPrivateEnterprise25(1),2009,5-22LessonsToBeLearnedFromTheFinancialCrisisSteveN.RobinsonUniversityofNorthCarolina–WilmingtonDerrickP.NantzCapeFearCommunityCollegeAbstractThisarticleaimstotakeacarefulandsoberinquiryintothepoliticalandeconomicoriginsoftoday’sfinancialcrisis.WefindthatthepoliticalandeconomiccausesofthiscrisislieintheeasymoneypolicyoftheFederalReserveandthedrasticregulatoryandpolicychangesinthemortgageindustry,whichdevelopedduringtheClintonyearsandcontinuedintotheBushadministrations.Wefindthatthesepolicychangesweremotivatedbyanadministration-widepoliticalgoalforaffordablehousing,agoalseenashavingmoralimportance,whichwasadvancedalmostwithoutregardtoitspotentialconsequences.JELCodes:G1,H11,P17Keywords:Economiccrisis;Capitalism;CRA;Subprime;FannieMae;PeterWallisonI.IntroductionAmericaisinacomplexeconomiccrisis.Whileitisnaturaltoask“Whoistoblame?”mostAmericansseemtobelievetheyalreadyknowtheanswertothisquestion:Itisbusinessmenwhoaretheguilty.PresidentObamaechoedthissentimentwhenhewarnedCEOsofAmerica’smajorfinancialinstitutions:“Myadministrationistheonlythingbetweenyouandthepitchforks”(Eamon,2009).Individualsinthiscountryhavelongheldthebeliefthatbusinessismorallycorruptor,atleast,amorallysuspectenterprise,andMarxists-socialistshavelongpredictedthattheactionsofcapitalists–throughtheirgreed,selfishness,andprofit-drivenbehavior–cannotgoonforever.Likethedrugaddict’sbingeortheconartist’sspree,capitalism’simmoralactivitiestoowillhavetocometoatragicend.Isthiseconomiccrisisasignofthatend?Thepresentarticleaimstotakeacarefulandsoberinquiryintooriginsofthiscrisisincontrasttotheemotionalist“pitchfork”5

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Title	Lessons To Be Learned From The Financial Crisis
Authors/Creators:	Steve N. Robinson, University of North Carolina–Wilmington Derrick P. Nantz, Cape Fear Community College
Year:	2009
Volume:	25
Number:	1
Pages:	5 - 22
Publisher:	The Association of Private Enterprise Education
ISSN:	0890-913X
Document Type:	Articles
Keywords:	Economic Recession, Capitalism, CRA, Subprime, Fannie Mae, Peter Wallison

Citation:
Robinson, Steve N.; Nantz, Derrick P. / 2009. "Lessons To Be Learned From The Financial Crisis." The Journal of Private Enterprise, 25(1): 5-22.